Tuesday, January 10, 2012

Nutty 77 Billion Dollar Profit Propaganda from the Fed

Reports WSJ with a straight face:
The Federal Reserve turned $76.9 billion over to the U.S. Treasury last year, close to the record amount transferred to the government's coffers in 2010, amid a strong profit generated from its expanding portfolio of securities.

Preliminary unaudited results released by the central bank Tuesday showed the Fed had net income of $78.9 billion in 2011 mainly thanks to higher earnings on securities it bought to counter the recession and promote recovery....the Fed's crisis-lending programs have produced profits. The increase in 2011 income was primarily a result of $83.6 billion in interest earnings from holdings of U.S. Treasurys, federal agency debt and securities held by government-run mortgage finance firms Fannie Mae and Freddie Mac, the Fed said.
Got that? The Fed printed billions of new dollars and earned a profit after all this nonsense. For the record the money supply (M2) grew in 2011 by nearly $ 850 billion. The total monetary base came in at aprox. $8.5 trillion.

Note: Don't try this at home. You would get arrested for counterfitting. But do you think you could "earn" a profit of $77 billion, if you printed, over-time,  some $8.5 trillion to buy Treasury securities and the like, which means, as part of the circus, you could give the Treasury the money to pay you the interest that you then give back to them and release a press release about your financial acumen?


  1. People always use the fact that the Fed must turn over its profits to the Treasury as proof that the Fed is just jolly good. It isn't the Fed who most benefits, it is its member banks (i.e. the cartel)-- this was the entire point of creating the Fed in the first place, to cartelize the banking system.

    Also, as Bob points out, all the new money is created with interest on the principle (i.e. new money enters the system through Treasury purchases), which means that the American people are on the hook. Do you think that it was any coincidence that the 16th amendment was passed the same year as the FRA? Collateral?

  2. It's crazy how they put this stuff in respectable financial publications and no one bats an eyelash.

  3. Do people even understand that the FED is a counterfeit racket and this news item is just plain stupid? The WSJ should have reported the FED earnings came from royalties from their invention Velcro. That would have been a bigger laugh.

  4. James Rickards in "Currency Wars" stated that since 2010 the Fed and Treasury decided the Fed could basically keep the cash on it's books and just give the Treasury IOUs. If this is true then it would make the statement "Reports WSJ with a straight face" even more poignant.

  5. Translated WSJ Headline for the Indoctrinated:

    "You Are Owned - Now Get Back To Work, Slaves"

    Film at 11:00.

  6. I love this line of reasoning praising bailouts as a success because they "made the government a profit". Yeah, lots of good things can be accomplished in the process of doing infinitely worse things.
    Walking down the sidewalk yesterday I could've broken some guy's arm to get his briefcase full of cash and make myself alot richer--my business is about to go under, and I employ dozens of people for goodness sake!
    Now before you get all moralistic on me, before you get all high and mighty--everyone knows the body heals a broken bone to stronger than before the break! And the guy had insurance for his briefcase and its contents, so he was made whole, and think of all the work I created for EMS starff, orthepedic surgeons/doctors/nurses, etc?

    This is the level of stupidity contained in bailout, loan rescue programs turning a "profit" for government (as if we would ever want to help Washington rake in profits...).